"I
believe the group has turned the page," Italy's largest bank,
UniCredit's chief executive, Federico Ghizzoni said. "We could have
staggered the losses over several years. We decided to take them all in
one year." It wasn't good news for many - Unicredit has reported a
record annual loss of $19 billion in U.S. dollars and says that it plans
to cut 8,500 jobs.

The company is to create an internal "bad bank" to manage a further 87 billion Euros of bad and risky loans, which will be reduced to 33 billion Euros in the next five years.

The planned job cuts will see the bank lose about six percent of its workforce by 2018.

UniCredit shares nonetheless rose by almost six percent, after it said it would not need a capital increase. The bank is confident it would get a clean bill of health when the European Central Bank reviews the finances of the eurozone's 128 biggest banks.

Ghizzoni is confident that he did the right thing. "I am serene. We have done more than what will be required."

The bank's huge loss, largely due to troubles in Italy and Eastern Europe, was one of the worst suffered by a European bank since the beginning of the European financial crisis.

The company is to create an internal "bad bank" to manage a further 87 billion Euros of bad and risky loans, which will be reduced to 33 billion Euros in the next five years.

Ghizzoni says he's planning a net profit of two billion Euros in 2014, based on signs of economic recovery in Italy, which accounts for 40 percent of the bank's revenues.

Finance ministers and banking leaders in January said that Europe's banking sector is "improving" but that risks remain.

Former head of the U.K.'s Financial Services Authority Lord Adair Turner said that loans to businesses and in the mortgage sector were still at "very low" levels.

Lord Turner said it was a mistake to assume that "lending would be magically unleashed," he warned. Speaking at the World Economic Forum in Davos, Lord Turner also said that rules governing Europe's banks could need strengthening.